Mr Leigh, chairman of the right-wing Cornerstone Group of 40 MPs, said the party appeared to have been "terrified into silence" on fundamental reform of schools and hospitals, where it had now accepted to dominant New Labour orthodoxy.

He warned core Tory voters could not be "taken for granted" and were increasingly in danger of defecting to single-issue parties such as the UK Independence Party.

Yesterday it emerged that UKIP plans to rebrand itself as the Independence Party and campaign on more than just Europe and immigration in an attempt to woo Tory voters.

Mr Leigh, a trade minister under John Major and now chairman of the influential Commons public accounts committee, said: "Is it any wonder that there is a steady drift of voters to UKIP and the BNP?

"Indeed, UKIP is cleverly making a bid for these votes by espousing a Thatcherite agenda across the whole field of issues."

Mr Leigh argued the two main parties were now so close together that many senior Conservatives could happily serve in a New Labour Cabinet.

The Gainsborough MP said Mr Cameron had "charm, intellect and compassion" and was obviously sincerely committed to the NHS and to tackling global warming.

But he added: "Why after a year of his leadership are we only one point ahead of where we were at the start?

"Why are we not cruising way ahead in the opinion polls, certain of victory in the face of a discredited government enmeshed in an unpopular war, spending and wasting our money at record levels?"

By contrast, Margaret Thatcher had opened up a "much more dominant position" by the same stage of her leadership of the Opposition, he said.

Mr Leigh's attack gives voice to mounting frustration among some MPs on the Right of the Conservative Party at Mr Cameron's approach.

So far, they have held back from openly criticising their leader as he has attempted to distance himself from Mrs Thatcher's legacy and torn up many of the policies that have led the party to defeat at the last three elections.

But the Cornerstone Group, which is made up of Eurosceptics, supporters of the social justice' agenda and Right-wing Christian MPs, increasingly fears that the party's core vote is being alienated.

One senior MP, who asked not to be named, said: "People are feeling pretty peeved. They need some assurances, quickly."

Cornerstone is now planning a series of submissions to Mr Cameron's policy reviews in the hope of influencing his pitch for power at the next election. It may also produce its own "mini-manifesto" next month.

Mr Leigh warned: "You can't take people for granted. You can't say, 'we've got x million votes, we're going to bank them', like some BBC gameshow.

"Unfortunately, there are alternatives."

Mr Leigh said many core supporters had been particularly dismayed by Mr Cameron's failure last week to back the Catholic Church in its battle to secure an exemption from new gay rights laws for its adoption agencies.

"That was an outrageous attack by the Government," he said. "The Conservative Party should be standing up for freedom against the dominant liberal orthodoxy."

He also condemned Mr Cameron's approach to taxation. The Tory leader has refused to offer upfront tax cuts, insisting voters do not want him to make promises he cannot keep.

Instead, he has vowed to share proceeds of any future growth in the economy between tax cuts and increases in public spending.

But Mr Leigh insisted: "When people are being taxed at record amounts in peace-time, we should be promising to hand money back with tax cuts for working families.

"We should be making the moral case for lower taxation. Everybody accepts the leader's argument that we cannot promise a certain amount off the pound at this stage, but we should be making the case.

"But we aren't saying we are going to cut taxes - quite the opposite."

Traditional Conservative policies of cutting taxes, free enterprise and strong immigration controls were increasingly dominant on the world stage, he added.

"Yet the current leadership orthodoxy is that we tried talking about these things during three elections and no-one listened.

"But were the policies wrong, or was the then leadership lacklustre in the way it presented them?" he asked.

"Was the economy too strong or Blair too plausible then? I believe all these things are true.

"What a tragedy it would be if just when our gut instincts are more and more in tune with the British people, we should abandon them.

"We don't need to kowtow before the liberal orthodoxy of the BBC or the Guardian."

Monday night Mr Cameron moved to slap down Mr Leigh, insisting his analysis was "completely wrong".

A spokesman for the Tory leader said: "We have had an incredibly successful first year, have a sustained poll lead over Labour and have taken the party back onto the centre ground.

"David has made it clear he would like to take the whole party with him, and works to do so.

"But ultimately, the party has got to change and be relevant to modern Britain. Edward Leigh is completely wrong."